Monday, 23 May 2016

Co-determination can close the pay gap

Owen Jones`s excellent article on the existence of practical alternatives
"to the inevitability of injustice" included Germany for its university
education without tuition fees, and for its "state-led industrial strategy",
but, surprisingly, not for its system of co-determination (The world can be
a source of hope, not of needless military invasions,19th May,2016).
Admittedly, its origins lie in its post-war imposition on West Germany by
the western powers, but the existence of workers` representatives on the
boards of large companies has played an important role, not only in the
so-called "economic miracle", but in the fact that pay gaps between
employees and bosses have never been allowed to increase exponentially, as
they have done in this country. Although Volkswagen is currently proving an
exception to this rule, obscene levels of  executive remuneration in the UK
are now, clearly, hindering productivity, with even Andy Haldane of the Bank
of England saying that "investment in physical and human capital" is being
decreased (Shareholders in boardroom pay protest at two more firms. 19th
May, 2016). Sir Gerry Grimstone may think "something akin to multilateral
nuclear disarmament" is needed to control boardroom pay, but
co-determination sounds less drastic, and in Jones`s words, "it`s time we
talked" about it (Pay pause,19th May,2016).

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